We advise that you DO NOT roll over to the June period before updating to 2021 Update 1c
The Revised Draft Amendment Bills affecting payroll - published on 1 May 2020 have been analysed and the Sage Pastel Payroll has made made the decisions on when and how these changes will be incorporated into the System.
The Revised Draft Amendment Bills featured mainly on three changes, these changes include:
- Proposed changes in regards to the Tax Deductible Limits for Donations towards the Solidarity fund
- Proposed SDL Contribution Holiday
- Proposed ETI Changes
Below I will further discuss what steps to be followed if you want to incorporate these changes in your payroll system. It is important to note, that at this point, the bills refered to are still in Draft and the changes are only proposed changes, please do not incorporate the changes into your system without the approval of your Tax Practitioner to do so:
Changes in regards to the Tax Deductible Limits for Donations towards the Solidarity fund:
As per the amended bills it is proposed to increase the limit of the allowable tax deduction in regards to donations towards the Solidarity Fund that will need to be reported against a new IRP5 code, 4055. This code is not yet available in the current version of Pastel Payroll, but will be included in version 2021 Update 1c of Pastel Payroll. Only the tax total will be incorporated into 2021 Update 1c, if your employees wish to donate towards the Solidarity fund, we advise that they create a new Template and Transaction. Please view our Sage City Article regarding this matter for more details on how to create the Template and Transaction.
SDL Contribution Holiday
We will not incorporate a forced SDL Removal within the system in an update. Clients in Pastel Payroll can change the system in under 2 minutes to ensure that the code 9150 - Skills Development Levy will stop calculating a value. Please view our Sage City Article regarding this matter for more details on how you can stop the calculation of SDL.
Proposed ETI Changes
From all of the proposed changes, the ETI changes are the most complicated. The proposed bill refers to the changes in calculations for ETI effective from the 1st of April 2020. These changes include the value of the ETI amount to be calculated, as well as changes to the Wage test.
In 2021 Update 1c, there will be a functionality to recalculated the April values for ETI to include these changes, the bills released on the 1st of May there is also a proposal made on how the differences can be paid. Please reach out to your tax practitioner for more clarity on how the correction will need to be done.
Update information:
2021 Update 1c is tentatively scheduled for release on the 28th of May 2020. We are aware that the release date is close to the Payroll Pay dates. The majority of the changes are in regards to ETI and the ETI will not impact the employees payslips to be processed in this period. Proposed changes in regards to the SDL Payment Holiday or Donations towards the Solidarity Fund can be processed before the update is released using the above mentioned articles and guides once they have been gazetted.
Currently Pastel Payroll is on 2021 Update 1a, an update 2021 Update 1b is tentatively scheduled for release on the 13th of May 2020. This update focuses on the COVID-19 changes for our Namibian and Botswana clients, 2021 Update 1c is the update that needs to be done for the ETI changes for South African clients.
Please see Sage's COVID-19 Tax Relief Measures Affecting Payroll guide below for more information regarding the changes:
COVID-19_Relief_Measures_Affecting_Payroll_V4.pdf
COVID-19_Relief_Measures_Affecting_Payroll_V4.pdf
